RNS Number : 1307L
11 May 2022
NEWS RELEASE, 11 MAY 2022
CHAIRMAN'S COMMENTS AT THE 2022 ANNUAL GENERAL MEETING
Antofagasta plc (the "Company") today released the script to be
used by the Chairman, Jean-Paul Luksic at the Company's Annual
General Meeting that commences at 2:00 pm today.
Good afternoon ladies and gentlemen.
Welcome to Antofagasta plc's 2022 Annual General Meeting.
It is a pleasure to be here in London to meet with our
shareholders after two years without being able to do so. Thank you
for joining us today, be it in person or virtually, and I confirm
that we have a quorum present.
Our directors, Juan Claro, Andronico Luksic and Vivianne Blanlot
are unable to be here today for personal or medical reasons but
Juan and Vivianne are joining us by video. In addition, Iván
Arriagada, our CEO and several senior members of his executive team
are also here. Photos and short biographies of each of our
Directors, including their Board and Committee roles, are set out
on pages 13 to 18 of the Notice of Meeting.
I would like to start with a brief overview of the strategy and
performance of your company and make some comments on the macro
environment in which we operate. Iván Arriagada will then make a
presentation about our performance in 2021 and then we will move
onto the formal part of the meeting when we propose and vote on the
resolutions set out in the Notice of Meeting, and after that I will
open the floor for questions.
I will start by saying a few words about operating
The COVID-19 pandemic has affected all our lives over the last
year, but thanks to the changes made to the way we work and the
additional safety and health measures we took, our operations and
projects have been able to continue, although with some delays at
our projects. By the end of the year over 97% of our employees,
contractors and sub-contractors had been double vaccinated and this
prepared them well for the rise in the omicron variant.
Even as the world grappled with the effects of the pandemic, it
also contended with the accelerating - and increasingly evident -
effects of climate change. Copper has a vital role to play in
helping countries, cities, and companies to decarbonise.
Indeed, addressing climate change is vital for the world, for
Chile and for your Company. Since 2019, the Board's risk management
framework has specifically included climate change as a principal
risk to the business; in 2020 the Board approved a comprehensive
Climate Change Strategy and in 2021 we also started to include
climate change as part of our capital allocation framework, and
using an internal carbon price in procurement and project
evaluations since earlier this year. Your company recognises the
tremendous responsibility - and opportunity - to provide the
materials for the green transition our societies are demanding.
No less important than the metal itself is how we produce it. We
view our responsibility as operating sustainably, reliably and with
respect for communities and the environment - so as to live up to
our Purpose of 'Developing Mining for a Better Future'.
During 2021 two of our mines, Centinela and Zaldívar, obtained
the Copper Mark, an initiative that ensures responsible production
practices across the industry.
As I mentioned to you last year, Antofagasta has set two new
emissions reduction targets: an updated target for 2025, and a
carbon-neutral target for 2050, which is in line with Chile's own
national target. We have made significant progress in this regard
and by the end of the year we expect all our mining operations will
be powered by energy solely from renewable sources.
Regarding water, we know that care for water is vital for the
environment, for local communities and for our operations. This is
particularly relevant at the moment as Chile continues to endure a
punishing drought that has lasted more than a decade. In 2019, we
began building a desalination plant for Los Pelambres and the first
stage of this project is due to start operation in the second half
of this year. We are also planning to double its capacity as soon
as the necessary permitting is obtained, and we expect the plant
will start operating at its expanded capacity in 2025.
These crucial issues are not only important for our business,
but also, I believe, for our industry as a whole and I am pleased
that your company is taking a leading role.
Now, turning to our performance in 2021, I am saddened to have
to report that a contractor suffered a fatal accident at Los
Pelambres in July last year. My condolences go to the family,
friends and colleagues of Mr Fernando Silva López.
Regarding production, I am able to report that despite external
pressures, such as the ongoing drought in Chile, higher input costs
and global supply chain challenges, Antofagasta produced 721,500
tonnes of copper at a net cash costs of $1.20/lb. The strong copper
price helped increase our annual revenue to $7.5 billion and our
EBITDA to $4.8 billion. Our total dividend for the year is equal to
the year's underlying net earnings of $1.4 billion and, if approved
by shareholders today, the final dividend of 118.9 cents per share
will be paid to shareholders on the 13 May.
I will turn now to the future and our plans for growth.
Looking ahead, we have strong embedded organic growth options
within our portfolio, including very sizeable mineral resources,
and the levers to unlock that growth that will allow us to produce
sustainably into the future.
We have a variety of exploration projects, which are in
different phases of evaluation that will generate organic growth
for the Company. One of these is the Cachorro project, a very
attractive recent discovery, which we included for the first time
this year in our resources statement. Our considerable mineral
resource base, gives us options to develop our inventory at a time
when copper supply is becoming increasingly constrained.
Looking at our current growth projects, the expansion of Los
Pelambres is over 76% advanced with the construction of the
desalination plant expected to be completed during the second half
of this year and the concentrator plant expansion in early
I would now like to say a few words about your Board, including
our commitment to diversity and inclusion.
Following the retirement of Ollie Oliveira from the Board in
July, Tony Jensen assumed the role of Senior Independent Director
and Chair of the Audit and Risk Committee, having served on the
Committee as a member for over a year.
Also during the year, Mike Anglin assumed the role of Projects
Committee Chair and joined the Sustainability and Stakeholder
Management Committee in place of Tony who rotated off that
Committee in line with the Company's policy.
The Board's ability to continue to deliver long-term sustainable
success relies on a detailed understanding of the views of our
workforce and other stakeholders. A particular priority is ensuring
that our senior management team is engaging with our workforce in
open, ongoing dialogue to maintain good relations and the trust
that has been built up with its employees.
We also have several programmes of constructive engagement with
our local communities. These entail working together with local
authorities, developing public-private alliances and engaging
transparently in open dialogue.
We believe that diverse companies outperform and attract better
talent than their peers. The Board has met the Parker Review target
for ethnic diversity and following Eugenia Parot's appointment in
April last year, 30% of the Board are now women. However, the
Board's Nomination and Governance Committee continues to work with
an independent external search consultancy to increase the Board's
Diversity makes us a more creative and responsive company. In
2018, Antofagasta set a goal of doubling the number of women in its
workforce by 2022 and we managed to achieve this target a year
Now, I would like to make a brief overview of what is happening
Chile is in the process of writing a new constitution. This can
provide the basis for a new social pact that unifies the country's
people. This opportunity will depend on the extent to which the new
text can build on what has been proven successful in the past,
while introducing changes that reflect the aims of the majority of
the population. Mining has been fundamental for the country over
its history and it will continue to be critical if Chile is to meet
the social and development requirements of the future. The final
draft of the new constitution must be completed by 4 July and will
then be voted on in a national referendum on 4 September.
A new mining royalty is currently being considered by the
government. It is not yet clear what the final form of this royalty
will be, but we expect that it will eventually result in increased
taxation for the industry. Although taxes are important, our view
is that the main contribution that mining makes to the economic
progress of the country comes from investment, high quality
employment, supplier development, innovation and technology
transfer, and community contributions. Approximately 80% of our
revenue is paid to these groups, with the balance paid as taxes to
the government and as dividends to shareholders. As such, any
revision to applicable taxation should ensure the industry remains
competitive and attractive for new investment and continuing
Mining represents over half of Chile's exports and more than 14%
of its GDP - while 90% of the revenue generated by the industry
remains in the Chilean economy. As one of Chile's largest mining
companies, we continue to welcome opportunities to constructively
explore how we can support the competitiveness of Chile's mining
industry and foster the country's economic growth and
I will finish with a few comments on the copper market.
Clearly there are significant uncertainties at the moment with
the rise in inflation and the conflict in Ukraine, but
notwithstanding, we expect demand for copper to continue to be
strong with a significant share of that growth coming from regions
other than China. Having made ambitious commitments to the green
economy in recent years, governments and companies are set to make
sizeable investments to meet them, as this has been accelerated by
the current energy crisis. The supply of copper is constrained by
declining resource quality as well as very long lead times - and
high scrutiny - for new projects.
Without additional, and yet to be committed investment in mine
production, the effect of grade decline and depletions will lead to
a growing supply gap. Antofagasta, nonetheless, is in a prime
position to capitalise on this growth in demand. We have the
embedded tons across our business, the ability to unlock them, and
we are a responsible and reliable producer.
To recap, 2021 was a year when Antofagasta demonstrated its
resilience, which is a testament to the creativity and commitment
of our employees and contractors. So, I would like to acknowledge -
and thank - everyone at Antofagasta who made this possible.
Now, I would like to pass over to Iván, who will make a
presentation, after which we will proceed with the formal part of
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